Buy low, sell high and make money in the stock market
Credit: Jo Ann Brown | ©Jo Ann Brown
It's not that people believe that major companies will fail. But, hearing about stock market crashes, bear markets, and bankrupt companies tends to send a chilling "buyer beware" message for many would be investors. The fear of not knowing how to buy stocks and possibly loosing money are the reasons most people never invest in the stock market.
Here's a little known secret, stock prices rise and fall every minute. If you purchase a stock when the price is high and sell when the price is low, you will loose money. On the other hand, if you purchase stock when the price is low and sell when the price is high, you will make money. Price, timing, dividends, and capital gains are the 4 things to look for when buying stock.
Price
Gather information about the company. Review the historical prices for this stock by using website finance.yahoo.com. Make a list of the company stocks you like and watch them for a while to help you determine a purchase price.
After deciding on a particular stock, watch the Dow Jones Industrial Average (DJIA). Most stock prices go down when the DJIA goes does. Likewise, most stock prices go up when the DJIA goes up. If you buy a stock when the DJIA goes down, you have a better chance of getting the lowest price.
Nothing beats a watch list that gives up to the minute selling prices. Showing the change percentage (plus or minus) will let you know price status. Patiently waiting until your stock falls will also ensure you of getting the lowest price.
Timing
The infamous "bear market" indicates when the stock prices have fallen to their lowest point in years. Take advantage of companies with fallen stock prices. These great bargains will soon disappear. Buy as many shares as you can afford during the "bear market."
Dividends
Not all companies pay a dividend. But those that do will typically pay them quarterly. Some companies even pay dividends monthly. The amounts paid for dividends vary.
Capital Gains
Like dividends, not all mutual funds pay capital gains. The frequency and amounts paid for capital gains also vary between companies.
Here's a little known secret, stock prices rise and fall every minute. If you purchase a stock when the price is high and sell when the price is low, you will loose money. On the other hand, if you purchase stock when the price is low and sell when the price is high, you will make money. Price, timing, dividends, and capital gains are the 4 things to look for when buying stock.
Price
Gather information about the company. Review the historical prices for this stock by using website finance.yahoo.com. Make a list of the company stocks you like and watch them for a while to help you determine a purchase price.
After deciding on a particular stock, watch the Dow Jones Industrial Average (DJIA). Most stock prices go down when the DJIA goes does. Likewise, most stock prices go up when the DJIA goes up. If you buy a stock when the DJIA goes down, you have a better chance of getting the lowest price.
Nothing beats a watch list that gives up to the minute selling prices. Showing the change percentage (plus or minus) will let you know price status. Patiently waiting until your stock falls will also ensure you of getting the lowest price.
Timing
The infamous "bear market" indicates when the stock prices have fallen to their lowest point in years. Take advantage of companies with fallen stock prices. These great bargains will soon disappear. Buy as many shares as you can afford during the "bear market."
Dividends
Not all companies pay a dividend. But those that do will typically pay them quarterly. Some companies even pay dividends monthly. The amounts paid for dividends vary.
Capital Gains
Like dividends, not all mutual funds pay capital gains. The frequency and amounts paid for capital gains also vary between companies.
Comments
Jo Ann, Good article. I will be using some these financial tactics to implement my overall strategy for retirement.
Willard...
Useful info, thanks!
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